There's little doubt that 2021 will look much different than this past year. Hopefully, for instance, we'll reach an inflection point in the pandemic and the threat of COVID-19 will largely recede at some point during the next 12 months.
But some trends that began or accelerated in 2020 will likely continue in 2021 and beyond. If you have $1,000 to invest, consider buying shares of these three companies, which are each poised to benefit from one of these trends.
1. Outdoor activities growth beneficiary: Garmin
Our growing desire to spend more time outdoors -- but socially-distanced from each other -- began to manifest early in the pandemic. Consumers cleared store shelves of bicycles, kayaks, and running gear. Boat manufacturers are reporting historically low inventory levels and continued sales backlogs. One boat maker recently said that most of its brands "have all production slots sold through the 2021 model year." Recreational vehicle makers are reporting similar high levels of interest.
Tech company Garmin (NASDAQ:GRMN) is benefiting from the surging popularity of boating, hiking, biking, and running. In its recently reported third quarter, the maker of devices for the outdoor recreational market had a 19% year-over-year increase in revenue. That's even more impressive considering that it had been experiencing strong revenue growth for several years prior to 2020.
The company that was once best known for automotive GPS devices now also offers a wide array of fitness trackers and smartwatches suited to various sports and activities, as well as systems for boats, among other tech. As interest in those outdoor activities continues to expand, expect Garmin's device sales to keep growing.
2. Renewable energy growth beneficiary: NextEra Energy
The transition toward a greener energy future is well underway, and it may accelerate in the U.S. once the Biden administration is in place. Investors looking to participate don't need to bet on unproven technologies, nor on businesses that might be years away from profitability.
NextEra Energy (NYSE:NEE) owns Florida Power & Light, the largest regulated electric utility in the U.S. by retail megawatt-hour sales, as well as Gulf Power, which serves northwestern Florida. Its other subsidiary is NextEra Energy Resources. This segment, along with its affiliates, is the world's largest generator of wind and solar power.
Despite its size, NextEra Energy Resources currently has a backlog of renewable projects that's larger than its existing portfolio. NextEra estimates 10% to 12% annual total-return potential through 2022 from earnings growth and dividends. And the stability that comes with operating a regulated utility means investors can count on the stock to provide income through any market cycles.
3. Sports betting growth beneficiary: MGM Resorts International
Among the things that November's election demonstrated is that there is momentum for legalizing sports betting. Voters in three more states passed ballot initiatives to do just that, bringing the total number where sports betting is legal to 21 states and Washington, D.C.
MGM Resorts International (NYSE:MGM) offers investors a way to capitalize on that trend, and its more well-known casino business still has growth potential too. In 2018, the company launched its BetMGM online sports betting and gambling app via a joint venture with Britain-based GVC Holdings (LSE:ENT). BetMGM is currently live in seven states, and more are expected to be added by the end of the year.
MGM has also been establishing partnerships with professional sports teams including the Pittsburgh Steelers, Denver Broncos, and Detroit Red Wings. While investors wait for the online segment to grow, a recovery in its Las Vegas Strip and Macao resorts should benefit the company in 2021.
A promising year ahead
Investors looking for a place to invest $1,000 or more would do well to look at Garmin, NextEra Energy, and MGM Resorts. Despite the economic upheaval created by the pandemic, their recent quarterly results reveal that these economic trends are providing the companies with clear tailwinds. And shareholders can expect that not even the eventual end of the pandemic will put the brakes on the growing popularity of outdoor recreation, renewable energy, or sports betting.